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Stryker Operating Results for Quarter Ended March 31, 2008


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KALAMAZOO, Mich., April 17 /PRNewswire-FirstCall/ -- Stryker Corporation (NYSE: SYK) reported operating results for the quarter ended March 31, 2008 as follows:

First Quarter Highlights

  • Net sales increased 14.7% (10.3% constant currency) to $1,634 million
  • Orthopaedic Implant sales increased 12.4% (7.3% constant currency)
  • MedSurg Equipment sales increased 18.1% (14.9% constant currency)
  • Net earnings from continuing operations increased 20.1% from $242 million to $291 million and net earnings increased 19.3% from $244 million to $291 million
  • Diluted net earnings per share from continuing operations increased 20.7% from $.58 to $.70

"We are pleased to report another strong quarter with double-digit sales growth and twenty percent growth in earnings from continuing operations," commented Stephen P. MacMillan, President and Chief Executive Officer. "The ability to draw on a broad base of businesses continues to be important to our success, with six of our U.S. franchises -- Spine, Trauma, Craniomaxillofacial, Instruments, Endoscopy and Medical -- leading the way with 18% collective growth this quarter."

Net sales were $1,634.4 million for the first quarter of 2008, representing a 14.7% increase over net sales of $1,425.5 million for the first quarter of 2007. On a constant currency basis, net sales increased 10.3% for the first quarter.

Net earnings from continuing operations for the first quarter of 2008 were $290.5 million, representing a 20.1% increase over net earnings from continuing operations of $241.8 million for the first quarter of 2007. Diluted net earnings per share from continuing operations for the first quarter of 2008 increased 20.7% to $.70 compared to $.58 for the first quarter of 2007.

Net earnings for the first quarter of 2008 were $290.5 million, representing a 19.3% increase over net earnings of $243.5 million for the first quarter of 2007. Diluted net earnings per share for the first quarter of 2008 increased 18.6% to $.70 compared to $.59 for the first quarter of 2007.

Sales Analysis

Domestic sales were $1,032.9 million for the first quarter of 2008, representing an increase of 13.1%, as a result of higher shipments of Orthopaedic Implants and MedSurg Equipment.

International sales were $601.5 million for the first quarter of 2008, representing an increase of 17.4%, as a result of higher shipments of Orthopaedic Implants and MedSurg Equipment. The impact of foreign currency comparisons to the dollar value of international sales was favorable by $62.0 million in the first quarter of 2008. On a constant currency basis, international sales increased 5.3% in the first quarter of 2008.

Worldwide sales of Orthopaedic Implants were $971.1 million for the first quarter of 2008, representing an increase of 12.4%, based on higher shipments of reconstructive (hip, knee and shoulder), trauma, spinal and craniomaxillofacial implant systems; and bone cement. On a constant currency basis, sales of Orthopaedic Implants increased 7.3% in the first quarter of 2008.

Worldwide sales of MedSurg Equipment were $663.3 million for the first quarter of 2008, representing an increase of 18.1%, based on higher shipments of surgical equipment; endoscopic, communications and digital imaging systems; as well as patient handling and emergency medical equipment. On a constant currency basis, sales of MedSurg Equipment increased 14.9% in the first quarter of 2008.

Income Taxes

The Company's effective income tax rate on earnings from continuing operations for the first quarter of 2008 was 28.1%, as compared to effective income tax rates on such earnings for the first quarter and year ended December 31, 2007 of 28.1% and 28.0%, respectively.

Outlook for 2008

The Company's outlook for 2008 continues to be optimistic regarding underlying growth rates in orthopaedic procedures and sales growth rates in the Company's broadly based range of products in orthopaedics and other medical specialties, despite the potential for continued pricing pressure in certain markets. The Company projects that diluted net earnings per share for 2008 will approximate $2.88, an increase of 20% over adjusted diluted net earnings per share from continuing operations of $2.40 in 2007. The financial forecast for 2008 includes a constant currency net sales increase in the range of 11% to 13% as a result of growth in shipments of Orthopaedic Implants and MedSurg Equipment. If foreign currency exchange rates hold near March 31, 2008 levels, the Company anticipates a favorable impact on net sales of approximately 4.5% to 5% in the second quarter of 2008 and a favorable impact on net sales of approximately 2.5% to 3.5% for the full year of 2008.

Conference Call

As previously announced, the Company will conduct a conference call for financial analysts at 4:30 p.m., Eastern Time, today. To participate in the conference call dial 800-510-0178 (domestic) or 617-614-3450 (international) and enter the participant passcode 99400509. A simultaneous webcast of the call will be accessible via the Company's website at www.stryker.com. The call will be archived on this site for 90 days.

A recording of the call will also be available from 6:30 p.m., Eastern Time today until 6:30 p.m. on Thursday, April 24, 2008. To hear this recording dial 888-286-8010 (domestic) or 617-801-6888 (international) and enter the passcode 31621619.

Forward-Looking Statements

This press release contains information that includes or is based on forward-looking statements within the meaning of the federal securities law that are subject to various risks and uncertainties that could cause the Company's actual results to differ materially from those expressed or implied in such statements. Such factors include, but are not limited to: pricing pressures generally, including cost-containment measures that could adversely affect the price of or demand for the Company's products; regulatory actions; unanticipated issues arising in connection with clinical studies and otherwise that affect U.S. Food and Drug Administration approval of new products; changes in reimbursement levels from third-party payors; a significant increase in product liability claims; changes in economic conditions that adversely affect the level of demand for the Company's products; changes in foreign exchange markets; changes in financial markets; and changes in the competitive environment. Additional information concerning these and other factors are contained in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

Stryker Corporation is one of the world's leading medical technology companies with the most broadly based range of products in orthopaedics and a significant presence in other medical specialties. Stryker works with respected medical professionals to help people lead more active and more satisfying lives. The Company's products include implants used in joint replacement, trauma, craniomaxillofacial and spinal surgeries; biologics; surgical, neurologic, ear, nose & throat and interventional pain equipment; and endoscopic, surgical navigation, communications and digital imaging systems; as well as patient handling and emergency medical equipment. For more information about Stryker, please visit the company web site at www.stryker.com.



                             STRYKER CORPORATION
               For the Three Month Period Ended March 31, 2008
              (Unaudited - In Millions Except Per Share Amounts)

                                                        First Quarter
    CONDENSED STATEMENTS OF EARNINGS           2008         2007     % Change

      Net sales                             $1,634.4     $1,425.5       14.7
      Cost of sales                            500.5        439.4       13.9

       GROSS PROFIT                          1,133.9        986.1       15.0
         % of Sales                             69.4         69.2

      Research, development and
       engineering expenses                     85.1         84.6        0.6
      Selling, general and
       administrative expenses                 654.5        568.1       15.2
      Intangibles amortization                  10.6         11.2       (5.4)

                                               750.2        663.9       13.0

       OPERATING INCOME                        383.7        322.2       19.1
         % of Sales                             23.5         22.6

      Other income (expense)                    20.3         14.2       43.0

       EARNINGS FROM CONTINUING
        OPERATIONS
        BEFORE INCOME TAXES                    404.0        336.4       20.1

      Income taxes                             113.5         94.6       20.0

       NET EARNINGS FROM CONTINUING
        OPERATIONS                             290.5        241.8       20.1

      Net earnings from discontinued
       operations                                -            1.7     (100.0)

       NET EARNINGS                           $290.5       $243.5       19.3


      Basic net earnings per share
       Net earnings from continuing
        operations                             $0.71        $0.59       20.3
       Net earnings from discontinued
        operations                              $-           $-           --
       Basic net earnings per share            $0.71        $0.60       18.3

      Diluted net earnings per share
       Net earnings from continuing
        operations                             $0.70        $0.58       20.7
       Net earnings from discontinued
        operations                              $-           $-           --
       Diluted net earnings per share          $0.70        $0.59       18.6

      Average Shares Outstanding
       Basic                                   411.4        408.6
       Diluted                                 417.9        416.0



                             STRYKER CORPORATION
                 For the Three Month Period Ended March 31, 2008
                            (Unaudited - In Millions)

                                                     First Quarter
                                                                  % Change
                                                                      Constant
    CONDENSED SALES ANALYSIS                  2008     2007  Reported Currency

      Domestic                              $1,032.9   $913.2   13.1     13.1
      International                            601.5    512.3   17.4      5.3


        NET SALES                           $1,634.4 $1,425.5   14.7     10.3


      Orthopaedic Implants                    $971.1   $864.0   12.4      7.3
      MedSurg Equipment                        663.3    561.5   18.1     14.9


        NET SALES                           $1,634.4 $1,425.5   14.7     10.3



                                                  First Quarter 2008
                                                       % Change
                                   Domestic  International         Total
                                                    Constant          Constant
                                  Reported Reported Currency Reported Currency
    SUPPLEMENTAL SALES GROWTH
     ANALYSIS

    Orthopaedic Implants sales:
       Hips                           2        6       (5)       4       (1)
       Knees                         12       17        6       14        9
       Trauma                        23       25       11       24       16
       Spine                         25       14        2       22       18
       Craniomaxillofacial           30       17        5       25       21
       Total Orthopaedic Implants    11       14        3       12        7

    MedSurg Equipment sales:
       Surgical equipment and
        surgical navigation systems  16       24       12       18       15
       Endoscopic, communications
        and digital imaging system   12       32       18       16       14
       Patient handling and
        emergency medical equipment  21       18        4       20       18
       Total MedSurg Equipment       16       25       12       18       15



                             STRYKER CORPORATION
                          (Unaudited - In Millions)

                                                   March 31        December 31
    CONDENSED BALANCE SHEETS                         2008              2007

       ASSETS

       Cash and cash equivalents                    $423.5            $290.5

       Marketable securities                       1,939.3           2,120.3

       Accounts receivable (net)                   1,094.6           1,030.7

       Inventories                                   894.6             796.2

       Other current assets                          711.9             667.2

         TOTAL CURRENT ASSETS                      5,063.9           4,904.9

       Property, Plant and Equipment (net)         1,023.4             991.6

       Goodwill and Other Intangibles (net)          957.6             925.5

       Other Assets                                  709.2             532.0

         TOTAL ASSETS                             $7,754.1          $7,354.0


       LIABILITIES AND SHAREHOLDERS' EQUITY

       Current Liabilities                        $1,149.2          $1,333.0

       Other Liabilities                             672.1             642.5

       Shareholders' Equity                        5,932.8           5,378.5

       TOTAL LIABILITIES AND
       SHAREHOLDERS' EQUITY                       $7,754.1          $7,354.0



                             STRYKER CORPORATION
               For the Three Month Period Ended March 31, 2008
                          (Unaudited - In Millions)

                                                          First Quarter
    CONDENSED STATEMENTS OF CASH FLOWS               2008               2007

      OPERATING ACTIVITIES

      Net earnings from continuing operations       $290.5             $241.8

      Depreciation                                    38.7               31.9

      Amortization                                    59.5               55.2

      Changes in working capital and other          (197.9)            (176.2)

        NET CASH PROVIDED BY OPERATING
         ACTIVITIES                                  190.8              152.7


      INVESTING ACTIVITIES

      Acquisitions, net of cash acquired              (6.2)              (5.7)

      Proceeds from sales of (purchases
       of) marketable securities, net                 91.6             (171.4)

      Purchases of property, plant and
       equipment                                     (30.9)             (40.8)

      Proceeds from sales of property,
       plant and equipment                             0.1                0.2

      Other                                            -                 (1.2)

        NET CASH PROVIDED BY (USED IN)
         INVESTING ACTIVITIES                         54.6             (218.9)


      FINANCING ACTIVITIES

      Proceeds from borrowings, net                    0.8                0.4

      Dividends paid                                (135.6)             (89.7)

      Other                                            4.5               30.5

        NET CASH USED IN FINANCING
         ACTIVITIES                                 (130.3)             (58.8)

      Effect of exchange rate changes on
       cash and cash equivalents                      17.9                2.7

        CHANGE IN CASH AND CASH EQUIVALENTS         $133.0            $(122.3)

SOURCE: Stryker Corporation

CONTACT:
Katherine A. Owen, Vice President, Strategy and Investor Relations, of Stryker Corporation, +1-269-385-2600